Dana Gas is being consulted on whether to sell its $500 million offshore Merak-1 well in Egypt as no commercial discovery has been made there, Reuters reported.
Investment bank Tudor, Pickering, Holt & Co. (TPH) will offer its advise for the sale of the Egyptian assets, where the Abu Dhabi-listed energy producer plans to focus on a single geographical area instead.
According to the company, no commercial hydrocarbons were found from Merak-1 well and thus, the well shall be abandoned. However, the rest of its operations in Egypt shall continue production normally.
Dana Gas began drilling the offshore Merak well in Block 6 in the Eastern Mediterranean Sea last May, and it was estimated to hold up to 4 trillion cubic feet of gas.
Block 6 is at 755 metres depth in the North El Arish concession in Egypt. After drilling 3,890 metres and encountering 46 m of sand in the Miocene objective interval, Dana Gas decided to plug and abandon the well, as costs would be higher than expected.
The rest of the company’s exploration and production (E&P) assets in Egypt are onshore in the Nile Delta.
Dana Gas produced 34.1 kilos barrels of oil equivalent per day (boe/d) in Egypt in Q1 2019.
Egypt paid the Emirati company in June $38 million in overdue arrears, reducing its outstanding receivables to $125 million, the lowest level since 2011.